1. This is a reference by Shivdayal, J., in a Second Appeal arising out of an application by the landlord under Section 10 of the M. P. Accommodation Control Act, 1961 (hereinafter referred to as the Act) for fixation of standard rent.
2. The appellant Laxmandas has been occupying the shop in suit as a tenant of the respondent Mst. Barfi Bai on a monthly rent of Rs. 55/- per month. The respondent filed an application before the Rent Controlling Authority under Section 10 of the Act for fixation of standard rent. Her case was that the monthly rent of the shop on 1-1-1948 was Rs. 61/- per month while the house-tax of the entire building of which the shop in suit was a part was Rs. 16/- on 1-1-1948. The tax had since been raised to Rs. 74.50 P. The respondent claimed that the standard rent shouldbe fixed at Rs. 104.69 P. per month by allowing an increase of 70 per cent under Section 7 of the Act. The application was dismissed by the Rent Controlling Authority Being aggrieved thereby the respondent filed an appeal before the District Judge who determined the standard rent at Rs. 104.69 P. per month. The appellant (tenant) thereupon filed a second appeal which came up for hearing before Shiv Dayal, J.
3. The main point urged before him was that as no evidence was adduced by either party of the entry in the Municipal Assessment Register the standard rent cannot be determined in accordance with the principles laid down in Section 7 (2) of the Act, and, therefore, it should have been determined under Section 10 (4) of the Act. Shivdayal, J., was not prepared to accept this contention and was about to dismiss the appeal summarily, but he referred the question to a larger Bench in view of the decision of Razzaque, J., in Misc. Appeal No. 14 of 1966 (Ramkrishna v. Takhanmal), D/- 8-8-1966 (Madh Fra).
4. Thus the point for consideration is whether the standard rent can be fixed under Clause (2) of Section 7 in the absence of any evidence as to what was the rent of the accommodation as shown in the Municipal Assessment Register on 1-1-1948 and if not whether the standard rent in such a case should be determined under Sub-section (4) of Section 10 of the Act. For a proper consideration of this question it is necessary to refer to the provisions of Section 7. This section is divided into three clauses. Clause (1) provides that where the reasonable annual rent or fair rent of any accommodation has been fixed by a competent authority under the repealed Act such rent shall be the standard rent of such accommodation. We are not concerned with this clause because it is not applicable to this case. Clause (3) provides for standard rent of accommodation not falling under Clause (1) or (2). This is a residuary clause. This clause is also not applicable to this case.
5. Clause (2) is the relevant clause for the purposes of this case and it is reproduced here for facility of reference:--
'7. Standard rent-- 'Standard rent' In relation to any accommodation means--
(1) ... ... ...(2) (i) where the accommodation was let out on or before the 1st day of January, 1948, and the reasonable annual rent or fair rent has not been so fixed, the rent of that accommodation as shown in the Municipal Assessment Register or as was realised on the 1stday of January, 1948, whichever is less; or
(ii) Where the accommodation was not let out on or before the 1st day of January, 1948, the rent of that accommodation as shown in the Municipal Assessment Register or as could be realised on the 1st day of January, 1948, whichever is less; increased--
(a) in the case of a residential accommodation and accommodation used for education purposes, by thirty-five per cent of such rent;
(b) in the case of other accommodation, by seventy per cent of such rent; and
(c) in case the tenant is not liable to pay the municipal tax and there has been any increase in municipal tax subsequent to 1st day of January, 1948, by an amount equal to such increase:
Provided that the increase specified in paragraphs fa) and (b) shall be permissible only if the - accommodation has been kept in good and tenantable repairs;'
It would appear from the language of the aforesaid Clause that it is applicable to accommodation which was in existence on 1-1-1948. As Clause (3) is the residuary Clause it apparently relates to accommodation which was constructed after 1-1-1948.
5-A. In the instant case, Sub-clause (1) of Clause (2) is applicable because the accommodation was let out on 1-1-1948. According to this sub-clause the rent of the accommodation as shown in the Municipal Assessment Register or as was realised on 1st day of January, 1948, whichever is less shall be the basis for determining the standard rent after taking into account the increase permissible under Clause (2). Shivdayal, J., was of the view that the said sub-clause will apply even if only one of the two criteria namely, rent realised on 1-1-1948 and rent shown in the Municipal Assessment Register on 1-1-1948, is proved, and the standard rent can be fixed on that basis. According to him in a case where both the criteria are proved it is the lesser rent which will be the basis for the standard rent, but the question of lesser rent would not arise where only one of the criteria is proved. It is for the tenant to prove the other criterion if he wants to take advantage of the lesser rate.
6. Razzaque, J. in Misc. Appeal No. 14 of 1966, D/- 8-8-1966 (Madh Pra) (supra) observed as under while dealing with this question:--
'In other words, the prescribed comparison to ascertain the amount 'whichever is less' as contemplated by Sub-section 2 (i) of Section 7 is necessary. Andthis cannot be reached unless a landlord mentions in his application as to what amount of rent was realised by him on the first day of January 1948 and what was shown in the municipal assessment register on that date. In the instant case, the landlord has simply shown that Rs. 60/- per month used to be realised by him as rent of the premises in question on 1st day of January, 1948, but he did not say a word in his plaint regarding the fact as to what amount of rent was shown in the municipal assessment register of the year. In other words, the very foundation required for the prescribed comparison was wanting in his application. Accordingly, in the absence of that no standard rent could be fixed.'
7. After carefully examining the entire scheme of the Act and relevant provisions having a bearing on the matter we are inclined to agree with the view expressed by Razzaque J. and our reasons are as follows. The preamble of the Act describes it as an Act to provide for the regulation and control of letting and rent of accommodation and eviction of tenants therefrom. The relations between landlords and tenants are normally regulated by the law of contract. But on account of enormous increase of population in urban areas and paucity of accommodation the owners of buildings in such areas are in a position to exploit the tenants by charging exorbitant rent. The object of the Act is to save a tenant from such exploitation and to allow a landlord to charge only reasonable rent of the accommodation from a tenant. The standard rent to be fixed under Section 10 represents the reasonable rent to be determined by the rent-controlling authority in accordance with the principles laid down in Section 7 and other provisions of the Act. If we carefully scrutinise the provisions of Section 7 it would appear that the rent of the accommodation as shown in the Municipal Assessment Register provides the crucial test for determining what should be the standard rent. According to Clause (2) of Section 7 the agreed rent on 1-1-1948 or the rent which could be realised on 1-1-1948 can form the basis for determination of standard rent only if it is less or equal to the rent of the accommodation as shown in the Municipal Assessment Register and not otherwise. The reason is obvious. The rent as shown in the Municipal Assessment Register usually represents the fair rent of the building and, therefore, it is absolutely necessary to take it into account for the purpose of determining the standard rent.
8. A careful examination of theprovisions of CL (3) of Section 7 fortifies theaforesaid view. Under Sub-clause (a) ofClause (3) if the accommodation is separately assessed to Municipal Assessment,the annual rent according to such assessment plus 15 per cent shall be thestandard rent, Sub-cl. (c) of Clause (3)provides that if the accommodation isnot so assessed the standard rent hasto be determined by taking into accountthe agreed rent and the annual rentcalculated on the basis of cost of construction whichever is less. The words'whichever is less' occurring in Clause (2)and Sub-clause (c) of Clause (3) make it clearthat both the criteria laid down therein must be proved because a comparison of the two is essential and thestandard rent has to be determined onthe basis of the one, which is less. Inour view, it would not be correct totreat the words 'whichever is less'to be applicable only where both thecriteria are proved and leaving it tothe choice of the party concerned toignore these words by proving only oneof the two criteria. It appears to usthat for purposes of both Clause (2) as wellas Sub-clause (c) of Clause (3) the words'whichever is less' are of great significance, making it obligatory on the partywhich wants to have the standard rentdetermined on the principles laid downin the said Clause to prove both thecriteria.
9. The question, therefore, arises as to how the Rent Controlling Authority is to proceed where the party concerned is able to prove only one criterion either because it is not in a position to adduce necessary evidence relating to the other criterion or because it is not possible to do so. For example, in a case falling within the purview of Clause (2) there may be no entry of rent in the Municipal Assessment Register on 1-1-1948 or a copy of the entry may not be available for some reason. It appears to us that in such a case the only course open to the Rent Controlling Authority would be to determine the standard rent under Sub-section (4) of Section 10 of the Act which reads as follows :--
'Section 10. Rent Controlling Authority to fix standard rent etc.
(1) ... ... ... (2) ... ... ... (3) ... ... ... (4) Where for any reason it is not possible to determine the standard rent of any accommodation on the principles set forth under Section 7, the Rent Controlling Authority may fix such rent as would be reasonable having regard to the situation, locality and condition of the accommodation and the amenitiesprovided therein and where there are similar or nearly similar accommodations in the locality, having regard also to standard rent payable in respect of such accommodation.'
10. It is clear from the aforesaid sub-section that is attracted where it is not possible for the Rent Controlling Authority to determine the standard rent in accordance with the principles set forth in Section 7. Section 7 covers all sorts of accommodation and it appears to us that the only situation in which Sub-section (4) of Section 10 will be attracted is when both the criteria laid down in Section 7 are not proved. In fact learned counsel for both the sides were unable to point out to us any other situation in which this sub-section may be attracted.
11. Thus reading Sub-section (4) of Section 10 with Section 7 it would appear that both the criteria laid down in Clause (2) and Sub-clause (c) of Clause (3) of Section 7 are essential and vital for the determination of standard rent and where either of them is missing, it is not possible to determine the standard rent on the principles set forth therein and the case would fall under Sub-section (4) of Section 10 which provides for the determination of the standard rent on the basis of the situation, locality, condition etc., and the standard rent payable for a similar accommodation in the vicinity.
12. It would be of some interest to refer in this connection to the provisions in the previous enactments of this nature. In the M. P. Accommodation Control Act, 1955, the relevant provisions relating to reasonable annual rent are contained in Clause (e) of Section 3 which reads as follows:--
' 'Reasonable annual rent' means the rent of that accommodation as shown in the Municipal Assessment Register or as was realised or could be realised on the 1st of January, 1941, or could have been so realised if the accommodation were completed on the 1st of January, 1941, whichever is less, increased by 35 per cent if it is a residential accommodation and by 70 per cent if it is not a residential accommodation:
Provided that the above increases shall be allowed only if the landlord has kept the accommodation in good condition by necessary repairs.
Provided further that if there is any increase in the tax assessed to the accommodation, the landlord may collect that amount from the tenant by proportionally adding it to the rent.'
The aforesaid clause corresponds to Section 7 of the present Act., which lays down the principles for determining the reasonable annual rent or in otherwords the standard rent. In Sushila Devi v. Y.P. Mishra, M. P. No. 251 of 1960 (j), D/- 16-2-1961 = 1961 MPLJ (SN) 94, a Division Bench of this Court while dealing with a case under Section 3 (e) read with Section 9 of the Act of 1955, held that under Clause (e) evidence about the annual rent entered in the Municipal Assessment Register is necessary. It was further held therein that if evidence of the Municipal Assessment Register was not available and the property was also not in occupation of any tenant on that date then the Rent Controlling Authority could fix reasonable annual rent on the basis of the rent which could be realised on 1-1-1941. A similar view was expressed in Shiromal v. Sheikh Mohammed, 1961 MPLJ (SN) 102. Thus it was consistently held under the old enactment that the rent as shown in the Municipal Assessment Register was essential for determination of the reasonable rent and that it could be determined on the basis of the other criteria only where the evidence relating to the rent as shown in the Municipal Assessment Register was not available.
13. It may here be noted that under the old Act of 1955 there was no provision corresponding to Sub-section (4) of Section 10 of the present Act. In the absence of such a provision it could be contended that various modes for determining 'reasonable rent' provided in Clause (e) of Section 3 of the Act of 1955 were alternative modes and the reasonable rent could be determined in accordance with any one of them where the evidence relating to other modes was not available. But in view of the provisions of Sub-section (4) of Section 10 of the present Act it is clear that where the evidence relating to both the criteria is not available the standard rent must be determined in accordance with the principles laid down in Sub-section (4) of Section 10 of the present Act.
14. Thus in our view, it would not be correct to hold that the determination of standard rent with reference to the rent entered in the Municipal Assessment Register under Section 7 is only one of the various alternatives and it is open to the Rent Controlling Authority to determine the rent on the basis of any of the alternatives. In our view such a construction would render the provisions of Sub-section (4) of Section 10 of the present Act otiose and will also give a very restricted meaning to the expression 'whichever is less' in Section 7 of the Act. It is a settled principle of construction of statutes that they should be so construed as not to render any part thereof redundant or meaningless.
15. In Aswani Kumar v. Arabinda Bose, AIR 1952 SC 369 their Lordships observed in paragraph No. 26 that it is not a sound principle of construction to brush aside the words in a statute as being inapposite surpluses. Similarly in Shiv Bahadursingh v. State of V. P. AIR 1953 SC 394 their Lordships observed in paragraph 5 that it is incumbent on the Court to avoid a construction, if reasonably permissible on the language, which would render a part of the statute devoid of any meaning or application.
16. It was also contended on behalf of the respondents that the Court could determine the rent as entered in the Municipal Assessment Register on the basis of the house-tax, keeping in view the provisions of Sections 52 and 54 of the Gwalior Municipalities Act. We are unable to accept this contention. In accordance with the principles laid down in Section 7 what is necessary is to see what rent was actually entered in the Municipal Assessment Register on 1-1-1948. It is not permissible to arrive at a conclusion regarding such rent on the basis of tax or other evidence. We may here point out that in 1961 MPLJ (SN) 94 (supra) it was held that the evidence of the entry in the Municipal Assessment Register could not be replaced by an inference about the probable rent on the basis of an entry in the Municipal Assessment Register in the subsequent years. Thus we are of the view that where a party wants to have the standard rent determined on the principles laid down in Clause (2) of Section 7 of the Act he must produce a copy of the entry in the Municipal Assessment Register of 1-1-1948. If he fails to do so the standard rent cannot be determined in accordance with the principles laid down in Section 7 and it may, therefore, be determined in accordance with the provisions of Sub-section (4) of Section 10 of the Act
17. We answer the reference accordingly.